Don't Mess With Taxes

If you’re into tax history, you might want to download the Internal Revenue Service’s fiscal year 2024 Data Book.

First, this year’s edition marks the publication’s 30-year anniversary. Prior to the first Data Book, the IRS issued annual reports. But the new format expanded on that, now provides a fiscal year statistical overview of the agency’s operations.

Second, this year’s document, officially IRS Publication 55-B, has details on some notable tax agency accomplishments. You already know about one of them, the collection of more than $5 trillion in tax revenue, from this post’s headline, but there are more.

Third, future Data Book information is not likely to be as positive. The IRS, like the rest of the federal government, is being slashed by the Trump administration, what remains of the Department of Government Efficiency (DOGE) after creator Elon Musk has stepped away (or at least back a bit), and the Republican Congress.

Heck, the agency might not even publish another Data Book. You never know what might be axed next.

For now, though, we have the latest IRS Data Book with details on the agency’s work from Oct. 1, 2023, to Sept. 30, 2024. While the $5.1 trillion in tax collection reported in the document is a momentous accomplishment, I’m giving this weekend’s By the Numbers honor to the full Data Book and its IRS Publication number 55-B.

You can peruse the document at your leisure, but to whet your tax appetite, here are some of its other numerical highlights.

Gross tax collections exceeded $5 trillion. For the first time, revenue collected exceeded $5 trillion dollars, specifically $5.1 trillion. That was an increase of almost 9 percent compared to the prior fiscal year total of $4.7 trillion.

IRS actions provide most of Uncle Sam’s funding. Donald J. Trump’s has repeatedly said tariffs could replace our current income system, that’s a long way from happening, even if courts and Congress ultimately give the practice the go ahead. Revenue collected by the IRS accounts for about 96 percent of all government funding.

Collection of unpaid taxes increased. When individuals and companies don’t voluntarily pay the legal amount of tax they owe, the IRS’ collection function goes to work. Its personnel collects federal taxes that have been reported or assessed, but not paid. It also secures tax returns that have not been filed.

During fiscal 2024, the net collections from these follow-ups totaled almost $77.6 billion, an increase of 13.6 percent compared to the prior fiscal year.

In addition, more taxpayers settled their tax debts during the last fiscal year through installment agreements, the IRS’ payment plan program that allows individuals and small businesses to pay their debt over time. In fiscal year 2024, the agency collected more than $16 billion through these extended payment agreements, an increase of more than 12 percent compared to the prior fiscal year.

IRS’ taxpayer services improved. The 2024 IRS Data Book says that the agency provided improved levels of service during the past two filing seasons. During fiscal 2024, the IRS assisted taxpayers on 62.2 million occasions, up 3.2 percent compared to the prior fiscal year.

This assistance also improved in each of the major categories of taxpayer assistance — live telephone assistance, automated telephone assistance, and assistance provided at Taxpayer Assistance Centers, or TACs.

IRS toll-free customer service lines provided live telephone assistance to almost 20 million callers during fiscal year 2024, up almost 11 percent compared to the previous year. The agency also helped more than 2 million taxpayers in person at its TACs nationwide, an increase of almost 26 percent compared to fiscal year 2023.

Part of the bump in TAC numbers was due to the IRS’ decision to open many of the facilities across the country on Saturdays in filing season 2024. Taxpayers seeking in-person help but who couldn’t arrange it during the weekdays because they had jobs could walk in to the Saturday-open TACs without scheduling an appointment.

Those TAC numbers underscore this post’s opening observation. We’re not going to see such face-to-face numbers again any time soon. The IRS has been ordered by the Trump administration to close more than 110 offices with TACs.

Online IRS self-service increased. Some of that lost in-person taxpayer assistance might be replaced by the agency’s growing self-service offerings. The IRS’ Digital First initiative in fiscal 2024 launched more digital tools than it had during the prior 20 years, including initiatives for tax professionals and C corporations.

The Data Book reports that the agency’s online offerings saw more than 2 billion electronic taxpayer assistance transactions, up 47 percent compared to the prior fiscal year’s total of 1.4 billion.

The most popular features were requests for transcripts and, not surprisingly, use of IRS.gov’s Where’s My Refund? The IRS tallied more than 382.8 million inquiries on the popular tax refund tracking tool, up 26 percent compared to the prior year.

Direct File likely done. Another new digital option looks to be on the chopping block, if not already dropped. During the 2024 filing year, the IRS launched Direct File, a pilot for free, online tax preparation software and electronic filing done completely within the agency.

Essentially, Direct File is (was) the IRS’ version of the tax software featured in the Free File program, and by the major manufacturers who left the no-cost filing program.

As in all pilots, the initial Direct File offering had limited tax scope and only supported a small sector of individual tax returns from taxpayers in 12 states. It also was rolled out in phases.

During that initial Direct File season, an estimated 423,450 taxpayers logged into the program, with 140,803 of them submitting an accepted return. Of all Direct File users with an accepted return, 72 percent received a tax refund, with roughly $90.4 million issued.

Twenty-four percent of the first Direct File users with an accepted return owed taxes, with almost $35.3 million in gross taxes collected. The remaining 4 percent of users had a $0 balance due.

While the numbers were low, it was a planned limited pilot program. Since individuals’ money and tax information is being use, the agency understandably chose to take a cautious route.

The pilot also received positive responses from the small sampling of Direct File users, as well as interest from state tax departments that coordinated the free filing of those separate returns. So, the IRS expanded Direct File for the 2025 filing season. Those numbers for Direct File usage in 25 states should be in the next fiscal year’s IRS Data Book.

But the second phase of Direct File data might be for naught. DOGE shut down the General Services Administration’s 18F digital tech consultancy team, which helped build Direct File. The tech group members are appealing their removal, arguing that the Trump administration didn’t follow legal requirements when carrying out the workforce cuts.

However, many Republican members of Congress oppose Direct File. Trump’s IRS Commissioner pick, former Missouri Rep. Billy Long, has no tax or technical background. So, we’ve probably seen the last of Direct File.

You also might find these items of interest:

• 4 ways to file your taxes for free
• Avoid IRS telephone hold time by going online
• IRS adds W-2 and 1099-A forms to taxpayer online accounts
• IRS Commissioner touts the tax agency's generational digital transformation

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